Chapter 7 Managing Emerging Technologies Managing the Information Technology Resource Jerry N. Luftman

Chapter Outline  Importance of understanding emerging technologies  Should organization be pioneer, leader, or follower  Best time to adopt new technology  How to introduce and appropriate apply new technology

Technology Life Cycle  Emerging Technology  Technology considered innovation  Still developing in capability/capacity  Pacing Technology  Technology is growing in acceptance  Key Technology  Provides competitive differential  Base Technology  Final phase of life cycle  Required technology

© 2004 Managing the Information Technology Resource, Jerry N. LuftmanChapter 7 - Slide 4

Adoption of Technology  Innovators (Technology enthusiasts)  Willing to take higher risks  Early Adopters (Visionaries)  More visionary  Early Majority (Pragmatists)  Wait for more assurance for success of technology  Late Majority (Conservatives)  Must adopt technology to stay current  Laggards (Skeptics)  True skeptics; must adopt to stay in the market

Moore’s Product Provider View of Technology Innovation  Early Market  Look to be first with new paradigm  Chasm  Early market interest wanes  Bowling Alley  Niche-based adoption in advance of general marketplace  Tornado  Mass-market adoption  Main Street  Aftermarket development  Flesh out potential  End of Life  Ignored and presumed in original model  Enable new paradigms to come to market

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Strategies for Technology Development

Diffusion Curve

Managing Change

Learning S-Curve

Three Strategic Postures  Shape the future  Play leadership role in establishing how industry operates  Adopt to the future  Recognizing and capturing opportunities in existing markets  Reserve right to play  Invest sufficiently to stay in the game  Avoid premature commitments

Innovations Influence on Rate of Adoption  Relative Advantage  Considers degree innovation is perceived to be better  Compatibility  Higher level of compatibility with values and needs  Complexity  If difficult to learn, use, or implement will slow rate  Trialability  If easily experimental, will have better adoption chance  Observability  Degree to which innovation can be seen

Increasing Returns of Adoption  Learning by using  Increase in benefits technology brings as adopters gain experience and knowledge  Positive network externalities  Greater the number of users, greater the benefit  Technological interrelatedness  Existence of compatible products that will increase larger base of adopters

Characteristics of Early Adopters  Ability to amortize costs of learning  Ability to acquire any given amount of new knowledge with less effort  Higher level of initial knowledge about given technology

Assimilation Gap

Identifying Emerging Technologies  What Can Happen?  Keep abreast of technologies being developed  What Will Happen?  Engineering hurdles may exist  What Should Happen?  Consideration of social, political, and ethical issues  How Will It Happen?  R&D may envision product differently than actual application of it

Inhibitors to Emerging Technology  Delayed participation  Sticking with the familiar  Reluctance to fully commit  Lack of persistence

Human Resource Considerations  Availability of Talent  Best personnel to evaluate technology  Resource Allocation  Dedicated resources for evaluation and implementation  Motivation  Project failure/success is a possibility  Knowledge Management  Sharing of lessons learned  Utilize outside consultants  Protect new knowledge for competitive advantage

Technology Scanning  Keeping abreast of developments in technology  Books and Periodicals  Formal Studies  Personal Contacts  Professional Organizations/Workshops/Conventions  R & D Organizations  State and Federal Departments  Universities  Vendors and Consultants  Early Adopters

Factors for Successful Introduction 1. Identify problem and opportunity that technology addresses 2. Identify and empower a champion 3. Create cross-functional, dedicated, accountable team 4. Build supportive environment for introduction of technology 5. Identify and address associated risks 6. Manage the project

Technology Assessment Process 1. Scoping Establish scope/domain of technology search 2. Searching Screen technologies Search for signs/viability of emerging technology 3. Evaluating Identify/prioritize technologies Evaluate based on abilities, needs, competitive opportunities 4. Committing How it should be pursued and implemented

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Selling Technology to Senior Executives  Sell business solution  Identify value to organization  Compare new to existing technologies  Consider range of alternatives  Create champions throughout organization  Manage expectations  Start small to mitigate risks  Look to other industries for changes  Understand iterative/evolutionary nature  Underpromise  Be honest

Prioritize and Focus  Prototype, demo, and show users  Be intimate with business drivers  Understand business requirements  Highlight benefits  Weigh risks  Identify those that enable new business

Prioritize and Focus  Identify those that are easily integrated  Measure risks and ability to absorb failure/success  Understand organizational culture  Set aside money for changes

Developing the Business Case  Identify business need  How does it fit in current priorities  Identify areas to be impacted  Benefits to/impact on bottom line  Competitive landscape  Identify assumptions and justify

Developing the Business Case  Utilize proof of concepts/prototype  Add validity to proof of concept  Evaluate implementation options  Evaluate fit  Feedback  Identify project champion

When to Deploy Emerging Technologies  Look at industry trends  Benchmark  Evaluate when risk of not doing it is greater than doing it  Pilot technology to validate proof of concept/direction  Utilize outside consultants to evaluate

Lessons from the Past  Expert predictions are fallible  Timing is relevant  Iterate and review frequently  Which new technologies become adopted is hard to predict  Consequences of adoptions take long time to become evident

Laws of Technology  Bigger Computers Are Better  Grosch’s Law  Smaller Computers Are Better  Moore  Connected Computers Are Better  Metcalfe  Machines May Leap, but Programs Creep  Wirth  Networks Will Triple Every Year  Gilder